Table of Contents
- Executive Summary: Key Takeaways on Inflation in Oman
- Current Inflation Rates and Major Contributors in 2025
- Government Policy and Monetary Measures (Source: cbfs.gov.om, moa.gov.om)
- Sectoral Impacts: Food, Energy, Housing, and Transportation
- Taxation, Law, and Regulatory Compliance (Source: taxoman.gov.om, moci.gov.om)
- Exchange Rates, Imports, and Global Supply Chain Effects
- Consumer Price Index and Key Economic Statistics (Source: ncsi.gov.om)
- Wage Growth, Employment, and Social Implications
- Three-to-Five-Year Inflation Forecasts and Scenario Analysis
- Strategic Recommendations for Businesses and Investors
- Sources & References
Executive Summary: Key Takeaways on Inflation in Oman
Oman’s inflation landscape in 2025 is shaped by a combination of domestic policy efforts, global commodity dynamics, and regional economic developments. After experiencing modest inflationary pressures in 2022 and 2023, Oman has entered 2025 with a relatively stable inflation outlook, reflecting both effective government interventions and favorable external factors.
- Current Inflation Rate: As of early 2025, Oman’s annual inflation rate remains moderate, with the Consumer Price Index (CPI) registering an increase of around 1.5% year-on-year. This is a continuation of the subdued inflation seen in 2023, where annual inflation averaged 1.2% (National Centre for Statistics and Information (NCSI)).
- Key Drivers: The main contributors to inflation in Oman have been food and beverage prices, periodic adjustments to fuel prices, and housing-related costs. However, these increases have been partially offset by government subsidies and targeted price controls, particularly on essential commodities (Central Bank of Oman).
- Policy Measures and Compliance: The Omani government has maintained a prudent fiscal stance, continuing subsidy reforms while ensuring support for vulnerable households. The Central Bank of Oman has reinforced vigilance in monetary policy, aiming to anchor inflation expectations and ensure financial stability. Regulatory authorities have also implemented compliance checks on price ceilings for essential goods to curb unjustified price hikes (Public Authority for Consumer Protection).
- Legal and Regulatory Framework: Oman’s anti-inflationary measures are grounded in consumer protection laws, including regular monitoring of market prices and enforcement of penalties for price manipulation. Compliance with these laws has been a priority for retailers and distributors, especially in the wake of periodic supply chain disruptions.
- Outlook for 2025–2027: Barring major external shocks, inflation in Oman is expected to remain contained in the 1.5%–2.0% range over the next few years. This forecast assumes continued government intervention in strategic sectors, stable global energy prices, and gradual economic diversification as outlined in Oman Vision 2040 (Oman Vision 2040).
In summary, Oman’s inflation trends for 2025 and beyond are largely stable, underpinned by proactive policy measures, robust compliance systems, and a supportive legal environment. The country’s approach positions it well to manage inflationary pressures while supporting economic resilience.
Current Inflation Rates and Major Contributors in 2025
In 2025, Oman continues to experience moderate inflationary pressures, reflecting both domestic policy decisions and external economic developments. According to the latest data released by the National Centre for Statistics and Information (NCSI), the annual inflation rate for Oman in early 2025 is estimated at approximately 2.1%, marking a slight increase from the average of 1.2% observed in 2024. This uptick is largely attributed to global commodity price fluctuations, supply chain adjustments, and ongoing fiscal reforms.
The primary contributors to inflation in Oman are changes in food and non-alcoholic beverage prices, housing costs, and transport sectors. Food prices, in particular, have risen by nearly 3.5% year-on-year, driven by higher import costs amid international market volatility. The housing, water, electricity, gas, and other fuels category has also recorded a modest rise of 1.8%, reflecting both utility tariff adjustments and increased demand for residential accommodation in urban centers. Transportation expenses, impacted by fluctuating global fuel prices and adjustments in domestic fuel subsidies, have seen a 2.4% increase compared to the previous year.
Oman’s government remains committed to maintaining inflation within its target range through a combination of monetary and fiscal measures. The Central Bank of Oman (CBO) continues to align its monetary policy closely with the US Federal Reserve due to the Omani Rial’s peg to the US dollar, which provides a degree of price stability but also transmits imported inflation when the US dollar weakens. The Central Bank of Oman has reiterated its focus on vigilant monitoring of liquidity and credit growth, ensuring that inflation does not accelerate beyond manageable levels.
On the regulatory front, the government has enforced compliance with price controls for essential goods through the Ministry of Commerce, Industry and Investment Promotion. Regular inspections and penalties for unjustified price hikes have been strengthened as part of consumer protection efforts. Additionally, the introduction of targeted subsidies and support for low-income households has helped cushion the impact of rising living costs.
Looking forward, official projections suggest that inflation in Oman is expected to remain moderate, with rates hovering between 2% and 2.5% through 2026. The country’s ongoing economic diversification efforts, as outlined in Oman Vision 2040, aim to reduce dependence on imported goods and enhance local production capabilities, which could help mitigate future inflationary risks. However, external shocks—such as volatility in global energy markets—remain potential threats to price stability.
Government Policy and Monetary Measures (Source: cbfs.gov.om, moa.gov.om)
Oman’s inflation trends in 2025 are shaped by a confluence of global and domestic factors, with government policy and monetary measures playing a pivotal role. The Central Bank of Oman (CBO) continues to anchor its monetary policy framework to the Omani Rial’s peg to the US dollar, which provides a degree of stability against imported inflation, especially for energy and food products. In its latest annual reports, the CBO notes that headline inflation remained moderate in 2024, averaging around 1.2%, due to contained global commodity prices and stable domestic supply chains. However, the Ministry of Economy projects that inflation may edge higher in 2025, primarily due to anticipated adjustments in energy subsidies and possible upticks in global food prices.
Key legislative and regulatory measures have been implemented to safeguard price stability and consumer welfare. The Central Bank of Oman regulates money supply and utilizes reserve requirements and open market operations as its main monetary tools. In addition, the government’s subsidy reform and price monitoring initiatives—overseen jointly by the Ministry of Agriculture, Fisheries and Water Resources and the Ministry of Commerce, Industry & Investment Promotion—aim to ensure that changes in global prices do not translate into excessive volatility for Omani consumers.
Compliance with price control regulations is enforced through regular inspections and a price registration system for essential goods. The Ministry of Commerce, Industry & Investment Promotion has intensified its oversight in response to recent supply chain disruptions, seeking to curb unjustified price increases and prevent hoarding or market manipulation. Meanwhile, the Ministry of Agriculture, Fisheries and Water Resources has expanded support for domestic food production to buffer against imported inflation, especially in grain, dairy, and vegetable sectors.
Looking ahead to 2025 and beyond, the CBO expects inflation to remain within a manageable range, likely between 1.5% and 2.5%, provided that global markets stabilize and domestic reforms are effectively implemented. The government’s Vision 2040 framework, which emphasizes economic diversification and local production, is expected to further insulate Oman from external price shocks over the medium term. Continued coordination among monetary authorities, ministries, and enforcement agencies will be critical to ensuring inflationary pressures remain subdued and predictable.
- Central Bank of Oman
- Ministry of Agriculture, Fisheries and Water Resources
Sectoral Impacts: Food, Energy, Housing, and Transportation
Oman’s inflation trends have shown measured volatility across key sectors, with food, energy, housing, and transportation each contributing uniquely to the overall consumer price index (CPI). The Sultanate’s inflation rate remained relatively subdued throughout 2023 and 2024, with annual inflation averaging around 1.0% in 2023 and showing a modest uptick entering 2025. These trends are shaped by global commodity prices, domestic subsidy reforms, and regulatory responses to external economic pressures.
- Food: Food inflation in Oman has been moderate, supported by government efforts to stabilize import supply chains and enhance food security. According to the National Centre for Statistics and Information (NCSI), food and non-alcoholic beverages registered a year-on-year price increase of approximately 2.2% by early 2025. Strategic stockpiling and policy incentives for local agriculture have buffered the sector from extreme global price shocks.
- Energy: The energy sector’s inflationary impact has been contained through a combination of targeted subsidies and gradual price adjustments. The Ministry of Energy and Minerals continues to oversee regulated fuel pricing, and subsidy rationalization has been carefully phased to balance fiscal objectives with consumer protection (Ministry of Energy and Minerals). Electricity and fuel prices have seen only incremental increases, helping to mitigate cost-push inflation in the broader economy.
- Housing: Housing costs in Oman have exhibited stability, partly due to subdued demand in the real estate sector and ongoing government support for affordable housing initiatives. Rental rates have remained largely flat from 2023 through 2025, with the NCSI reporting a marginal annual increase of 0.6% in the housing, water, electricity, gas, and other fuels category as of Q1 2025 (National Centre for Statistics and Information (NCSI)).
- Transportation: Transportation costs have experienced mild inflationary pressure, primarily due to global oil price fluctuations and the gradual reduction of fuel subsidies. However, regulatory oversight has kept annual transportation inflation below 1.5% as of early 2025. The government’s commitment to public transport infrastructure and fuel price stabilization mechanisms are expected to limit sharp increases through 2026 (Ministry of Transport, Communications and Information Technology).
Looking ahead, inflation in Oman across these key sectors is projected to remain moderate, provided global commodity markets stabilize and the government continues its prudent approach to subsidy management and sectoral regulation. Ongoing legal and compliance measures, such as price monitoring and anti-profiteering controls, further support a contained inflationary outlook for 2025 and the ensuing years.
Taxation, Law, and Regulatory Compliance (Source: taxoman.gov.om, moci.gov.om)
Inflation in Oman has remained a central consideration for policymakers, directly influencing tax policies, regulatory compliance requirements, and the broader economic landscape. As of early 2025, Oman’s inflation rate continues to reflect a moderate trend, with the National Centre for Statistics and Information reporting an annual inflation rate of approximately 1.2% as of December 2024, a figure that has remained relatively stable since 2023. This stability is attributed to the government’s prudent fiscal policies, the stable Omani rial (pegged to the US dollar), and ongoing energy subsidies that help contain price volatility in key sectors.
From a regulatory perspective, inflation trends are closely monitored by the Ministry of Commerce, Industry and Investment Promotion, which collaborates with the Central Bank of Oman to ensure price stability and protect consumer purchasing power. The Ministry has implemented periodic reviews of the prices of essential goods and services, and enforces compliance with price controls in sectors deemed critical to the cost of living, such as food, fuel, and housing. Violations of price control regulations can result in penalties, as stipulated under the Consumer Protection Law and associated executive regulations (Ministry of Commerce, Industry and Investment Promotion).
On the taxation front, the Royal Decree No. 121/2020, which introduced Value Added Tax (VAT) at a standard rate of 5%, remains a key fiscal tool. The Tax Authority has maintained that VAT exemptions and zero-rating for certain basic commodities are designed to mitigate the inflationary impact on lower-income households. The Tax Authority conducts ongoing compliance audits and issues guidance to businesses on pricing transparency and VAT application in the context of inflationary trends (Tax Authority).
Looking ahead, the outlook for inflation in Oman through 2025 and the following years is cautiously optimistic. The government’s Medium-Term Fiscal Plan aims to achieve further fiscal consolidation while supporting economic diversification under Oman Vision 2040. This includes continued investment in non-oil sectors, which is expected to enhance supply-side capacity and help moderate inflationary pressures. However, external risks remain, including global commodity price fluctuations and potential supply chain disruptions, which could impact domestic price levels.
In summary, Oman’s legal and regulatory framework is actively engaged in managing inflation trends, with robust compliance mechanisms and targeted policy measures. Authorities are expected to maintain vigilant oversight to ensure price stability, support economic growth, and protect consumer welfare in the evolving inflationary environment of 2025 and beyond.
Exchange Rates, Imports, and Global Supply Chain Effects
Oman’s inflation trends in 2025 are closely intertwined with exchange rate dynamics, the cost and availability of imports, and the broader global supply chain environment. As an oil-exporting nation with a currency—the Omani Rial (OMR)—pegged to the US dollar, Oman benefits from exchange rate stability against many of its major trading partners. This peg has historically helped anchor domestic price levels and curb imported inflation, even during periods of global currency volatility. The Central Bank of Oman has reaffirmed its commitment to this fixed exchange rate regime, citing its role in maintaining investor confidence and macroeconomic stability.
However, Oman’s heavy reliance on imports for food, manufactured goods, and industrial inputs exposes the economy to global price shocks. In 2023 and 2024, global supply chain disruptions—stemming from geopolitical tensions, energy market fluctuations, and logistical bottlenecks—contributed to elevated input costs and sporadic shortages. This resulted in a moderate uptick in consumer price inflation, with the annual inflation rate measured at 1.0% in 2023, compared to near-zero inflation in the preceding years (National Centre for Statistics and Information).
Looking ahead to 2025, the government continues to prioritize inflation control as part of its fiscal and monetary policy agenda. Efforts include monitoring import channels, expanding strategic food reserves, and supporting logistics infrastructure to mitigate external shocks. The Ministry of Commerce, Industry and Investment Promotion has also enhanced compliance measures for price controls on essential goods, protecting consumers from unwarranted price surges (Ministry of Commerce, Industry and Investment Promotion).
While the Rial’s peg to the US dollar provides a buffer, Oman remains susceptible to external developments, particularly if global commodity prices or shipping costs rise unexpectedly. The ongoing normalization of supply chains worldwide is projected to help contain import-driven inflation pressures in the near term. The Central Bank projects inflation to remain subdued, likely averaging between 1% and 2% through 2025, barring unforeseen global disruptions (Central Bank of Oman).
- The Rial’s dollar peg insulates Oman from currency-driven inflation volatility.
- Import-dependent sectors are sensitive to global supply chain and commodity price shifts.
- Government compliance measures target essential goods pricing to shield consumers.
- Inflation outlook for 2025 remains modest, reflecting expectations of stable supply chains and prudent policy.
Consumer Price Index and Key Economic Statistics (Source: ncsi.gov.om)
The consumer price index (CPI) serves as a primary indicator of inflation trends in Oman, reflecting changes in the average prices of a basket of goods and services typically consumed by households. The National Centre for Statistics and Information (NCSI) is the official authority responsible for compiling and publishing CPI data and related inflation statistics in the Sultanate.
As of early 2025, Oman has experienced moderate inflation rates compared to global averages. According to the most recent monthly bulletins by the National Centre for Statistics and Information, the annual inflation rate fluctuated between 1.5% and 2.3% through 2024 and into the first quarter of 2025. Key drivers of inflation during this period include rising global commodity prices, adjustments in fuel subsidies, and shifts in food import costs. Notably, the food and non-alcoholic beverages category, which constitutes a significant weight in the Omani CPI basket, exhibited above-average price increases, while housing, water, electricity, and fuel prices remained relatively stable due to ongoing government interventions.
Oman’s inflationary environment is shaped by a combination of external pressures and domestic policy measures. The government continues to manage price stability through several mechanisms. These include periodic reviews of regulated fuel prices, targeted subsidies for essential goods, and close monitoring of supply chain disruptions. The Ministry of Commerce, Industry and Investment Promotion, in collaboration with the NCSI, enforces compliance with price controls and anti-monopolistic practices to prevent unjustified price hikes in essential commodities (National Centre for Statistics and Information).
Legally, Oman’s consumer protection framework—anchored by the Consumer Protection Law—empowers authorities to take corrective action against price manipulation and ensures transparency in price reporting. Retailers and suppliers are required to comply with regulations on fair pricing, and the NCSI routinely audits market prices to detect deviations from official inflation targets.
Looking ahead, the outlook for inflation in Oman remains cautiously optimistic. The NCSI projects that inflation rates will remain contained within the target range of 2%–3% over the next few years, assuming stable global energy markets and continued fiscal reforms. Potential risks include imported inflation due to exchange rate fluctuations or volatility in international food markets. However, with the government’s ongoing commitment to economic diversification and price stability, significant inflationary spikes are not anticipated in the near to medium term (National Centre for Statistics and Information).
Wage Growth, Employment, and Social Implications
Oman’s inflation trends in 2025 are closely intertwined with the nation’s wage growth, employment dynamics, and broader social implications. After a period of moderate inflation following the global supply chain disruptions of 2021–2022, Oman experienced a stabilization in consumer prices through 2023 and 2024. The National Centre for Statistics and Information (NCSI) reported annual inflation rates averaging near 1.2% in 2023, with a slight uptick anticipated in 2025 due to ongoing adjustments in fuel prices and imported food costs.
The government’s wage policies have been shaped by both inflationary pressures and the need to sustain employment. The Ministry of Labour has continued to implement Omanization strategies, aiming to increase the proportion of Omani nationals in the workforce, particularly in the private sector. In response to cost-of-living concerns, a review of minimum wage regulations is underway, with potential adjustments expected to be announced during 2025. Current minimum wage regulations, last revised in 2023, set the national minimum wage for Omani workers at OMR 325 per month, exclusive of allowances.
Employment growth has remained steady, with official data indicating an unemployment rate of approximately 3.2% as of late 2024. The public sector remains a significant employer, but policy emphasis is increasingly placed on private sector job creation and support for small and medium-sized enterprises (SMEs) as part of Oman Vision 2040. The Ministry of Economy has launched targeted stimulus and training programs to foster youth employment and entrepreneurship, aiming to further reduce unemployment and mitigate the social effects of inflation.
Compliance with labor laws and employment regulations is actively monitored by the Ministry of Labour, with periodic inspections to ensure adherence to wage standards and working conditions. The government has also emphasized social protection measures, including subsidies for essential goods and expanded social welfare programs for vulnerable households, to cushion the impact of price fluctuations.
Looking ahead to 2025 and beyond, official forecasts suggest inflation will remain contained, with annual rates expected to hover between 1.5% and 2.0%, barring major external shocks. This relative price stability is projected to support gradual wage growth and sustained employment levels. However, the interplay between imported inflation, subsidy reforms, and wage adjustments will remain a key area of focus for policymakers as they balance economic competitiveness with social well-being.
Three-to-Five-Year Inflation Forecasts and Scenario Analysis
Oman’s inflation trajectory over the 2025–2028 period is shaped by domestic fiscal policy, evolving subsidy reforms, global commodity prices, and monetary policy alignment with regional partners. As of early 2025, headline inflation in Oman remains moderate. The latest available annual inflation rate for 2024 stood at about 1.1%, reflecting subdued price pressures due to stable global oil prices, contained import costs, and prudent domestic fiscal management (National Centre for Statistics and Information). Recent policy actions, such as the gradual reform of fuel and electricity subsidies—an initiative aligned with Oman Vision 2040—have created periodic upward pressure on consumer prices, though these are generally cushioned by targeted support for vulnerable groups (Ministry of Economy).
Looking forward, Oman’s inflation is projected to remain within a low-to-moderate range, broadly between 1.5% and 2.5% annually through 2028. This forecast is underpinned by several factors:
- Fiscal discipline and subsidy rationalization: Oman’s Fiscal Balance Plan, launched in 2020, continues to guide cautious government spending and the phased withdrawal of subsidies. These measures may occasionally push up consumer prices, but the government has established legal frameworks to monitor and mitigate excessive inflationary risks, including price controls on essential goods (Ministry of Commerce, Industry and Investment Promotion).
- Currency peg and imported inflation: The Omani Rial remains pegged to the US Dollar, anchoring inflation expectations and dampening the transmission of global price shocks. However, imported inflation risks persist, especially for food and energy, given Oman’s reliance on imports for many staples (Central Bank of Oman).
- Global commodity price scenario: Should oil and food prices spike globally, Oman could experience temporary inflationary surges. Conversely, stable or declining commodity prices would help contain domestic inflation.
- Legal and compliance developments: Oman continues to enforce the Consumer Protection Law (Royal Decree No. 66/2014), which prohibits unjustified price increases and mandates compliance by retailers and suppliers. The Public Authority for Consumer Protection actively monitors price movements, investigates complaints, and imposes penalties for violations (Public Authority for Consumer Protection).
Scenario analysis suggests that, barring unforeseen external shocks or sharp policy shifts, Oman’s inflation will remain manageable, supporting overall economic stability. However, vigilance is warranted: supply chain disruptions, abrupt subsidy removals, or significant global price volatility could temporarily push inflation above target ranges, necessitating responsive policy measures by the authorities.
Strategic Recommendations for Businesses and Investors
Oman’s inflation trajectory in 2025 and beyond is shaped by a combination of domestic policy adjustments, global commodity price fluctuations, and structural economic reforms. Businesses and investors navigating this environment should consider several strategic recommendations to mitigate risks and leverage emerging opportunities.
- Monitor Regulatory and Fiscal Developments: Oman’s government continues to implement fiscal consolidation and subsidy rationalization measures under its Vision 2040 framework. The introduction of Value Added Tax (VAT) in 2021 and ongoing fuel subsidy reforms have direct pass-through effects on consumer prices. Ongoing close monitoring of policy announcements from the Ministry of Finance and Ministry of Economy is essential, as further adjustments to tax rates or subsidies could influence inflationary pressures.
- Track Official Inflation Indicators: According to the National Centre for Statistics and Information, Oman’s annual inflation rate remained subdued in early 2024, hovering around 0.2%–0.5%. However, global energy price volatility and anticipated adjustments in administered prices could push inflation higher in 2025. Businesses should incorporate up-to-date inflation data in their financial planning and price-setting strategies.
- Revisit Pricing and Procurement Strategies: With potential for imported inflation due to global supply chain disruptions and currency fluctuations, companies should review supplier contracts and diversify sourcing. Forward contracts or hedging strategies may help mitigate cost volatility, especially in sectors reliant on imports.
- Leverage Government Support and Compliance Incentives: Oman’s authorities are offering targeted support for priority sectors as part of economic diversification. Staying informed about incentives, grants, or regulatory changes from entities such as the Ministry of Commerce, Industry and Investment Promotion can provide advantages. Compliance with new reporting or tax requirements remains crucial to avoid penalties amid evolving regulations.
- Scenario Planning and Risk Management: Given the moderate, but uncertain outlook for inflation (with the National Centre for Statistics and Information projecting inflation to remain below 2% barring major external shocks), scenario planning should be embedded in business strategy. Investors should monitor macroeconomic signals, such as changes in the Central Bank’s policy rates or major fiscal policy shifts, as early indicators of inflation trends.
In summary, a proactive, data-driven approach—grounded in official statistics and regulatory developments—will enable businesses and investors to navigate Oman’s inflation landscape through 2025 and the following years.
